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## Coal Transportation: Rates and Trends

Data for: 1979-2001 (partial 2002) Release Date: September 17, 2004 Next Update: As new data become available

Coal Transportation: Rates and Trends in the United States, 1979-2001 (with Supplementary Data to 2002) Introduction

In this report, the Energy Information Administration (EIA) is offering Excel spreadsheet files and data graphs that can be use d to address some of the questions often asked about transporting coal. We prepared these data files because much underlying data on coal transportation rates and costs of coal at mines must be withheld from our public Coal Transportation Rate Database (CTRDB)

. Following the Federal Energy Regulatory Commission (FERC) issuance in 1996 of Orders 888 and 889, establishing principles of open access and information sharing for electric transmission capacity, interest grew in electricity deregulation and private o wnership of utilities ' integrated assets. In that climate, many utilities that had previously disclosed transportation rates and mine prices changed policy. Those data were declared confidential and, by law, cannot be disclosed at individual company levels or in limit ed aggregations that analysts or competitors could use to impute the confidential data.



### The Excel spreadsheets, labeled and formatted as printable tables in this report, are presented at levels of aggregation that for the most part can be released (individual cells must be withheld in some cases). They furnish average coal transportation rate statistics, corresponding delivered prices, shipping distances, transportation modes, origins and destinations, and general contract terms. These statistics can be used to find representative rate and cost data and chronological trends that would be otherwise unavailable. The spreadsheets can be downloaded and, even though some elements may be withheld, they can be used or recompiled to examine other issues. To that end, we have tried to keep formats and layouts of related tables uniform.

The Excel tables and graphs are organized in seven sections, as follows: Section 1 - Coal Distribution and Receipts Section 2 - General Coal Transportation Rates, Distances, and Costs Section 3 - Coal Transportation Statistics by Demand Region Section 4 - Coal Transportation Statistics by Supply Region Section 5 - Trends in Coal Transportation Contracts Section 6 - Coal Transportation Rate Database, Metrics and Limitations Section 7 - Summary of 2001 Contract Coal Shipment Details Sections 1 through 5 are introduced in the following Summary and Discussion section. Sections 6 and 7 are introduced in the final two report sections, of the same names.

The tables in this report were compiled from transportation statistics supplied periodically by the Federal Energy Regulatory Commission (FERC) and the Department of Transportation, Surface Transportation Board. The report presents transportation-rate data calculated between specific origins and destinations for the most recent period, from 1999 through 2001, and for two baseline years, 1979 and 1990. The tables in Section 1 also include data for 2002 that are available from coal distribution and coal receipts surveys conducted by EIA, which provide some insight into coal volume and origin /destination trends beyond 2001. Tables based on nonconfidential information such as average national-level coal transportation distances, tonnages, and transportation rates (Section 2, Tables 2.05-2.09), cont ract information and statistics (Section 5, Table 5.01 and 5.02), and general database metrics and source information (Section 6, all four tables) include data for all years between 1979 and 2001. These tables do not include the more detailed origin/destination pair
calculations. 

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### Graphs have also been crea ted from selected statistics that illust rate important trends in U.S. coal transportation and distribution. In the Summary that fo llows, only major trends in coal transportation are illustrated. Click here to view Excel tables and graphs online. * To download the Excel files, click here

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*When viewing online, users of non-Microsoft browsers may need to use the index sheet to navigate the Excel tables and graphs.

Note: Rate data (for dollars per ton and dollars per ton-mile statistics) and mine price data for 2000 and 2001 are currently incomplete for eleven utilities. The Coal Transportation Rate Database will be updated when those missing data are received from the Federal Energy Regulatory Commission. In the meantime, statistics that involve transportation rates for 2000 and 2001 should be considered incomplete and subject to change.



## Summary and Discussion

This section describes as background some factors and general trends relevant to coal transportation and the use of this report and its spreadsheets. The ideal starting point for recent coal transportation rate statistics is 1979 - the last full year before t he passage of the 1980 Staggers Rail Act, which largely deregulated the U.S. rail industry. Prior to 1980, rail rates conformed to published tariffs regulated by the Interstate Commerce Commission; starting in 1980, common carrier railroads were encouraged to compete for business and allowed to set their own freight rates, with much lessened oversight. The earliest data in the CTRDB, EIA's coal transportation rate database, are for 1979. Other EIA data, for coal distribution and coal receipts, started much earlier. Beca use EIA was created in late 1977 and because of transitions in and redefinitions of energy data mandates, however, some 1979 statistics are not available. On the other hand, EIA coal distribution and coal receipts data are available more promptly than the coal transp ortation rate and associated data from the FERC biennial survey, Form 580. Accordingly, coal distribution and receipts data are presente d through 2002 whereas FERC Form 580 transportation rate data are available only through 2001.

Since deregulation, average rates for coal transportation contracts have declined steadily when measured in inflation-adjusted dollars, and in some cases even in nominal dollars. The average coal transportation rates per ton, and per ton-mile, are shown below in constant, year 2000 dollars.

Average contract coal transportation rates began to decline about two to five years after implementation of the Staggers Act. T he rates and related data in the CTRDB and in this report are for coal delivered under contract and exclude spot coal purchases, d efined 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.htmlas coal deliveries scheduled for 12 or fewer months. Starting in 1981, constant-dollar rates per ton began to decline but rates per tonmile increased through 1984. Interestingly, this shows that rates per ton (that is "flat rates") during that period were not ye t declining. The rate per ton-mile was still increasing, but the statistics show that on average shippers were simply purchasing coal less d istant from their facilities and holding down rates per ton by holding down mileage. This option would not have been universally feasi ble, however, to all shippers depending on the terms defined in existing supply contracts. It can be assumed that during this period many existing contract rates were renegotiated and that it took some years before the changes made much difference.

Users should take into account that the weighted average data in this report are indeed averages, and that individual rates and mine price outliers are not depicted. In some cases, they can be fo und in the CTRDB itself, especially prior to 1996. The rates show n are collected primarily from coal burning utilities and are not necessarily the rates available to industrial customers, almost all of whom tend to buy coal under smaller supply contracts.

The data show that customers have experienced a range of differences in coal transportation options during the 1979-2001 period

. Facilities served by rail can negotiate better rates if there is a competing railroad they can use, or a feasible competing tra nsportation mode. " Captive " mines and coal consumers - those located where a single carrier or mode is their only practical transportation option - have long claimed that they were offered only higher, take-it-or-leave-it rates. Barges generally offer the least expe nsive transportation rates, and facilities that can take advantage of barge shipment for all or even a significant part of the shippi ng distance can usually temper transportation costs. Different railroads use different rate structures and have in recent years implemented new requirements, such as automated loading and unloading equipment or 7-day-per-week loading and unloading, that affect supplier and customer overhead costs but are not reflected in rates. Rates charged may be lower for customers that lease or own their ow n fleet of coal cars.

Rates vary from one region to another, partly because there are different carriers involved, but also because some regions are well set up for coal transportation and others are not. Coal regions and coal fields and Census Regions and Census Divisions are def ined in Figures S2 and S3.

Figure S2. Coal Regi ons and Coal Fields

Coal Regions Coal Fields States

Appalachia Northern Appalachia MD, OH, PA, Northern WV 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.htmlCentral Appalachia Eastern KY, VA, Southern WV

Southern Appalachia AL, TN

Interior Illinois Basin Western KY, IL, IN

Gulf Coast Lignite TX, LA, MS

Other Western Interior AR, IA, KS, MO, OK

West Powder River Basin WY, MT

North Dakota Lignite ND

Southwest AZ, NM

Rockies CO, UT

Northwest AK, WA

This assignment of Tennessee to the Southern Appalachia coalfield does not conform to current EIA definitions. The coal-produc ing region of Tennessee is properly defined as being partly in the Central Appalachia coalfield and partly in the Southern Appalachia field, the divide between them corresponding with the boundary between the old Federally defined Coal Producing Districts 8 and 13. It is not feasible at this time to convert the 23 years' data in the CTRDB to the standard coalfield allocations.

Figure S3. Census Regions and Divisions

Census Regions Census Divisions

Northeast New England + Middle Atlantic

South South Atlantic + East South Central + West South Central

Midwest East North Central + West North Central

West Mountain + Pacific (Contiguous and Noncontiguous)

Source: Energy Information Administration, Office of Coal, Nuclear, Electric and Alternate Fuels. 1

1 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.htmlInfrastructure, trackage, switching facilities, loading equipment, and trained crews are more available in some geographic regi ons, and this certainly can affect rates. Table S1 illustrates changes in the quantities of coal used in Census Divisions between 19 79 and
2002.



### Coal Distribution and Receipts (Full spreadsheets at Tables 1.01

- 1.03 )

EIA's coal distribution data are collected from coal producing and coal sales compan ies. Responding companies identify all coal shipped by State of origin, by destination States, and by the consuming sectors to which the coal was sent. Coal distribution statistics span 1979 through 2002 and cover all but the smallest coal producers. Although producers and distributors may no t be aware of occasional secondary transfers, their destination and consuming sector data traditionally represent a credible upper boundary for coal quantities supplied to domestic consumers and to exports. Domestic coal distribution increased from 697 million short tons (mmst) in 1979 to 1,071 mmst in 2001, declining to 1,051 mmst in 2002 ( Table 1.01 ).

At the other end of the supply chain, EIA collects coal receipts data from electricity generators, metallurgical coke plants, a nd other industrial consumers. Overall agreement among these data, and with related distribution data, is good. Over time, collection of receipts data for minor and declining coal consuming sectors, such as agriculture, mining, and transportation, became impractic al. For that reason, there is no grand total representing all U.S. coal receipts. Figure S4 illustrates the historical relationship between EIA coal distribution and coal receipts data at electricity generators. Because electric generation constitutes about 90 percent of U.S. coal consumption, Figure S4 closely parallels total domestic coal disposition. Table S1. Domestic Coal Distribution to Census Divi sions, by Percentage of Total Coal Shipped, 1979, 1990, 1999, 2000, 2001, 2002

Census Division and Year 1979 1990 1999 2000 2001 2002

New England 0.2% 0.6% 0.3% 0.3% 0.3% 0.2%

Middle Atlantic 11.5% 8.4% 6.4% 7.0% 7.2% 6.7%

East North Central 30.9% 23.3% 23.5% 22.6% 22.7% 23.4%

West North Central 11.6% 12.8% 14.7% 13.7% 13.7% 14.9%

South Atlantic 15.6% 17.1% 16.0% 17.4% 17.3% 16.7%

East South Central 12.4% 10.2% 10.7% 10.5% 10.6% 10.4%

West South Central 7.0% 14.2% 15.1% 14.8% 14.5% 14.6%

Mountain 9.5% 11.7% 11.8% 11.4% 11.5% 11.3%

Pacific 1.2% 1.1% 1.4% 1.4% 1.6% 1.6%

Unknown Destination 0.1% 0.6% 0.2% 0.7% 0.6% 0.1%

Distribution percentages in 1979 do not account for about 4 million short tons of Pennsylvania anthracite coal; see Table 1.01 for details. Sources: Energy Information Administration, Coal Distribution, 1990 and (unpublished) 1999, 2000, 2001, 2002, Tables 6 and 8; 1979, Tables 1, 2, and 10-13. a

a 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.htmlCoal distribution and receipts data correlated closely during the past three decades, as shown, for example, in 1979 and 1990. In 1999 through 2002, reported coal receipts declined atypically in the electricity sector, relative to reported distribution. The discrepancies were caused by the sale during those years of former utility-owned generating units to independent, deregulated companies that were not required to report fuel receipts to the Federal Energy Regulatory Commission on the FERC Form 423 survey. Coal receipts by the electricity sector include coal delivered to “NAICS-22” power plants, that is, to establishments e ngaged principally in the provision of electric power, and exclude coal delivered to industrial and commercial facilities that may gen erate electricity as an adjunct to their primary business. Starting in 2002, EIA initiated a new data collection survey, the Form EIA -423, to collect fuel receipts data from both electricity sector and industrial or commercial generators with a capacity of 50 megawatts or greater.

The data collected on the new EIA-423 survey substantially reduced the discrepancy in receipts compared to distribution. The persistence of a smaller discrepancy is likely attributable to lags between the time when a sold power plant stopped reporting receipts to FERC and the time when the plant was picked up on the EIA-423 survey, and by difficulties defining all qualifying survey respondents. Adding to the discrepancy was a lapse in statutory authority for FERC’s Form 423 survey in 2001.

The dark blue bars in Figure S4 show reported coal distribution and illustrate the gap between distribution and reported coal r eceipts from 1999 through 2001. The receipts data are rounded out more fully by adding EIA’s estimates (2000 and 2001) and the author’s estimate (1999) of coal receipts at nonutilities and nonresponsive FERC-423 utilities (gray hachure-patterned bars). The yellow hachure-patterned bar segment represents residual non-reporting by utilities and nonutilities even after EIA and FERC-423 surve ys were resestablished. Since reported coal consumption data were relatively fully reported, non-reporting of coal receipts could be approximated by using the electricity sector coal consumption for 1998 through 2002, minus reported coal receipts, adjusted for yearto-year electricity sector stock changes. These differences were added to the 1999 through 2002 coal receipts in Figure S4.

Discrepancies between coal distribution and receipts data also expanded, beginning in 1999, because increasing tonnages of coal were processed at coal synfuel plants. Most of the synfuel produced is believed to have been received and consumed, ultimately, at electric power plants, with lesser amounts at metallurgical coke plants and other industrial plants (light blue bars, figures S 4 to S6). In order to preclude double counting of coal and coal synfuel consumption, EIA treats coal transferred to synfuel plants as distri buted to the Other Industrial sector, where it is transformed (not consumed) into a manufactured fuel product. It is possible that coal p roducers or distributors reported minor amounts of the coal processed at co-located or nearby synfuel plants (many of which were partly owned by electric power producers) as distributed to the electricity sector. Further, quantities of coal receipts at coal synfu el plants 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.htmlwere not surveyed until the 2001 calendar year, and early response rates were incomplete due to frequent changes in locations a nd ownership of the synfuel plants.

Figure S5, showing coal distribution and receipts at metallurgical coke plants, reflects the steel industry transition over the past two decades to less coke-intensive ways of producing iron and increased use of electric arc furnaces. Electric arc furnaces use scra p iron or steel as feedstock, which is remelted, reducing the need for highly coke-dependant blast furnace metal. Coal receipts to pro duce coke for blast furnaces and smelters declined from 78 mmst in 1979 to 24 mmst in 2002. The difference between distribution and receipts - 2 to 5 mmst between 2000 and 2002 - may indicate misidentification of the consuming sector for some distribution and /or the fact that some of the receipts at coke plants in that period were classified as coal synfuel or came from imported coal.

For 2001 and 2002, EIA has supplied approximations of synfuel coal receipts at coke plants (Table S5). There was no source of d ata on synfuel coal receipts during that period. EIA used 1998 through 2002 data on total coal delivered to synfuel plants, adjusted by the ratio of consumption of normal coal at coke plants to consumption of normal coal for the total U.S. The ratio was 0.061 and the assumption was that essentially 100 percent by weight of coal received at synfuel plants is converted to salable synfuel during each
year.

Figure S6 illustrates the gap, beginning in 2000, between coal distribution and receipts at the Other Industrial sector. In 200 0, a clear shortfall in receipts data resulted in part from the absence of data collection authority at coal synfuel plants. In 2001 and 2 002, with receipts at synfuel plants being surveyed, the impact of their operation was evident. By 2002, more than half of all coal recei ved in the Other Industrial sector was dedicated to synfuel operations.

There is the possibility that some of the “coal” receipts seen in the lower, pink bars in Figure S6 included coal synfuel. The 1998 through 2002 ratio of (normal) coal consumed by other industrial plants to total coal consumed in the U.S. was small: 0.026, or 2.6 percent. It is reasonable to assume—and there is evidence to support—that some manufacturing plants have consumed synfuel coal. If, as with coal, those plants accounted for 2 to 3 percent of total synfuel consumption, from 2000 through 2002 that would equ ate to 1 or 2 mmst of coal synfuel annual receipts at industrial plants, that may also have been counted (i.e., double-counted) as rec eipts at the synfuel plants, both within the Other Industrial sector.



### General Coal Transportation Rates, Distances, and Costs (Full Spreadsheets at Tables 2.01

- 2.09 )

Coal transportation in the United States underwent extensive changes in the years following the Staggers Act. These three sets of tables span the years 1979 through 2001. They show the cost-related changes between coal supply and major coal demand regions ( Tables 2.01

- 2.04) , the changes in shipping distances for coal from the coal field supply regions ( Tables 2.05a

- 2.05k ), and the changes in national average rates and costs of transporting contract coal to coal-fired utilities ( Tables 2.06

- 2.09) . Based on those data, the average cost per ton to transport coal in United States (by all modes) peaked in 1981 at $15.60 per short ton and by 2001 (preliminary data) had declined to $9.01 per short ton, expressed in constant, year 2000 dollars ( Table 2.06 ). That represents a 42 percent decline in the average contract rate per ton to transport coal to consumers. Table 2.06 shows that contract rail rates did not peak until 1984, at $17.52 per short ton, and had also declined by nearly 42 percent, to $10.19 per short ton by 2001 (in const ant, year 2000 dollars, preliminary data). Figure S5. U.S. Coal Di stribution vs Receipts for Metallurgical Coke (Million Short Tons) Figure S6. U.S. Coal Dist ribution vs Receipts for the Other Industrial Sector (Million Short Tons) 

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### Coal Transportation Statistics by Demand Region (Full spreadsheets at Tables 3.01

- 3.14 )

This group of tables includes " snapshots " that gather coal transportation statistics by demand region (Census Division) in 1979, 1990, 1999, 2000, and 2001, by mode of transport. The tables also show coal tonnages shipped to each demand region in each indexed year, in total, by mode of transport, and by coal sulfur content ranges. The last five tables, 3.10 through 3.14, prese nt statistics on coal transport costs for the same years but broken out by three ranges in contract size (based on actual tonnage shipped). The data in these tables are useful for comparing coal delivery cost differences among regions, over time, and based on size of contract.



### Coal Transportation Statistics by Supply Region (Full spreadsheets at Tables 4.01

- 4.11 )

In this grouping the tables include "snapshots" of coal transp ortation statistics assembled by supply region (coal field), for the years 1979, 1990, 1999, 2000, and 2001. For the five major producing coal fields (Central and Northern Appalachia, the Illinois and P owder River Basins, and the Rockies) non-withheld data are sufficient to show trends in transportation rates, which are shown in five sets of graphs. The data in the tables are useful for comparing coal delivery cost differences typical of the coal field supply regions , with changes over time. The tables show contract coal tonnages shipped from each coal field in each indexed year, in total, by mode of transport, and by coal sulfur content ranges. Where available, data for rail data have been added showing the rates and costs, and tonnages covered, for contract coal delivered in shipper-owned cars. Over the years, many utilities leased or purchased their o wn fleets of coal cars - usually of higher than average capacity - with the understanding that such shippers would be eligible for lower rail rates from the carriers.



### Trends in Coal Transportation Contracts (Full spreadsheets at Tables 5.01

- 5.08 )

As recently as 1998, the majority of active coal contracts co vered in the CTRDB were, when first signed, written for periods of 11 years or longer, including 23.1 percent of existing contracts in the CTRDB that had originally been written for 31 years or lon ger ( Table 5.02 ). Contracts written for 35 years were not uncommon in the mid-1970s, and some of those may still be in effect. In view of continuously declining coal prices during the 1980s and 1990s, coal customers grew disaffected with new long-term contracts. Wi th excess capacity in the coal industry, customers were able to set shorter terms for new contracts or renegotiate old contracts. It seemed more practical to coal buyers to limit contracts to 5 to 10 years and be well positioned to lock in later to (presumably ) still lower prices. Another trend that developed was including " reopeners " in new contracts - options that would permit customers to renegotiate prices at set times or per specific financial indices.

According to EIA statistics, average mine prices for coal (comprising both contract and spot sales) declined steadily throughou t the 1990s. The decline started to reverse in 2000, continued upward during 2001 and 2002, and is expected to have increased again i n 2003. Based on CTRDB data, nearly 97 percent of all new coal contracts written from 1999 through 2001 run for 5 years or less (Table 5.07) . Anecdotal information indicates that neither coal suppliers nor coal customers wanted longer contracts during those years-suppliers because prices in play were too low to sustain economic mining and customers because many electricity producers were in financial straits, had sufficient coal to postpone major purchases, and were convinced or hopeful that coal prices woul d eventually turn down again.



## Coal Transportation Rate Da tabase, Metrics and Limitations (

Full spreadsheets at 

## Tables 6.01

- 6.04)

This section summarizes the Coal Transportation Rate Data Base (CTRDB), including its content and data sources, data reliabilit y, data quality, data availability, and relationship to other data systems and coverage levels. The database can be downloaded at: http://www.eia.gov/cneaf/coa l/ctrdb/data base.html

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### History and Database Description

The CTRDB is a comprehensive databa se that contains electric utility coal supply contract data and transportation-related data. The data for this system are part of the detailed " Interrogatory on Fuel and Energy
Purchase Practices " collected by the Federal Energy Regulatory Commission (FERC) on Form 580. The survey is conducted every 2 years. It requires responses from all jurisdictional utilities that either operate or have ownership interest in at least one steam-electric generating station with a capacity of 50 megawatts or greater. Jurisdictional utilities, as de fined under the Public Utility Regulatory Policies Act of 1978, are facilities involved in the transmission of electric energy in interstate commerce and the sale of electric power at wholesale in interstate commerce. Juri sdictional utilities must file only if they use the Act’s Fuel Adjustment Clause to set electricity rates. 

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### Because of its specified authority, FERC collects no information on Form 580 for a significant portion (52 percent in 2001) of the contract coal consumed at and transported to U.S. electric utilities. In order to improve the coverage of the CTRDB and to provide a more comp rehensive view of transportation rates, supplementary data are obtained from FERC Form 423, " Monthly Report of Cost and Quality of Fuels for Electric Plants, " and from the Surface Transportation Board (STB), annual " Carload Waybill Sample. " The FERC 423 data are used to estimate missing transportation rate data using its delivered prices and Form 580 mine prices. For utilities not covered by Form 580 at all, the CTRDB has be en augmented with confiden tial transportation rates and shipping distances comput ed from STB waybill samples.

Starting with the 1998/1999 FERC Form 580 update, EIA opted to include in the CTRDB certain coal transportation rate and distance data from the STB Waybill Sample that meet EIA's quality assurance criteria but do not match deliveries of record to electric utilities. Such deliveries are believed to go to nearby industrial consumers. No actual coal supply contract information is associated with STB waybill data prepared for EIA and actual consumers are not identifi ed. EIA uses STB extracts of waybill data by counties of origin and destination for coal delivered to counties where Form 580 nonreporting utilities are located, and matches waybill delivery data with mine of or igin counties and tonnages from FE RC Form 423. The conclusion that certain waybill data represent coal deliveries to major industrial coal consumers is based on the coal sources and quantities and on the existence of industrial development in the destination counties. EIA identifies the

" Utility " for those data as "Industrial Coal," and assigns dummy contract codes numbered between 5900 and
5999.

The FERC Form 580 records contained within the CTRDB are contract- and route-oriented. For each utility plant receiving coal un der a specific contract, the CTRDB provides an origin-to-destination record for every route over which that plant's coal flows. A c ontract record within the CTRDB can be broken down into four subsets of data fields: contract accounting and specification information, plant information, route information, and transportation mode information. A utility company within the database can have several coa l supply contracts; one coal supply contract can serve several plants; an individual plant can receive coal from one supplier but sourced at several mines on the same contract; and an individual plant can be covered by several different contracts. Contract accounting, coal specifications, transportation and cost factors, and other details are described in the CTRDB file layout and Users Manual found in READMEpublic.doc supplied with CTRDB file downloads: http://www.eia.gov/cneaf/coa l/ctrdb/data base.html

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### Relationship to Other Data Systems and Coverage

Since the CTRDB is drawn primarily from the FERC Form 580 survey, its data consistency and coverage can
be described in the contex t of Form 580 and its relationship to other data systems. The Form 580 survey population is a subpopulation within FERC’s survey population for Form 423, "Monthly Report of Cost and Quality of Fuels for Electric Utilities. " Form 580 covers jurisdictional pub lic utilities while Form 423 covers all public utilities, i.e., inve stor-owned utilities, federall y owned utilities, municipalit ies, and coop eratives. The Form 580 survey is conducted every 2 years, while the Form 423 survey is conducted monthly.

As of 1993, FERC Form 423 covered approximately 235 utilities and 700 fossil-fueled power plants (coal, oil, and natural gas). Of those utilities, 173 utilities received coal at 412 power plants. FERC Form 580 in 1993 covered 117 utilities and 292 fossil-fu eled plants. As of 2001, the Form 423 coverage was down to 198 utilities and 605 fossil-fueled plants, of which 149 utilities and 34 3 plants had coal receipts. The Form 580 coverage for utilities with coal-fired plants was down to 83 utilities at 218 plants. (Coal-fir ed power plants are generally larger than oil- or natural gas-fired plants, so their net generation is relatively larger than the plant counts may imply.) Form 580 collects data for utility contract purchases on ly, however, whereas Form 423 collects data for both contract purchases and spot purchases. Spot purchases are purchase orders to obtain coal for a period of less than 1 year. Table 6.01 shows the breakout of Form 423 tonnage into contract and spot totals, CTRDB coal tonnages from Form 580 only and augmented with data from other sources (see below), and the augmented tonnage as a percentage of both the FERC 423 total tonnage and the FERC 423 contract tonnage.

Although both surveys collect data on utility contract purchases of coal, most utilities must report contract purchases on Form 423 but many are exempted from Form 580 reporting requirements. Thus, the Form 423 coverage and the contract tonnage reported is higher than for Form 580. Contract tonnage is the most useful variable to measure consistency of reporting for the two systems. In order to obtain a more comprehensive record of contract tonnage, the Form 580 contract tonnage was augmented with data derived from the Surface Transportation Board (STB) Carload Waybill Sample. The resulting contract tonnage in the CTRDB is the combination of Form 580 contract tonnage and STB Carload Waybill Sample derived contract tonnage. The total contract coal received at U.S. utilities in 2001 was 607.8 mmst according to Form 423. The 289.0 mmst of contract tonnage recorded by the CTRDB from Form 580 constitutes 47.6 percent of the Form 4 23 contract coal receipts. The CTRDB augmented tonnage totaled 

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6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.html486.7 mmst in 2001, which would account for 80.1 percent of the Form 423 contract tonnage total. It can be assumed that the augmented total includes both contract and spot tonnage because the STB survey does not collect contract information; however, the STB data are incorporated into the CTRDB only if they reflect compatible values with the analogous contract data from Form 580.

Survey differences contribute to four sources of variations between FERC Form 580 and FERC Form 423 data series: (1) difference s in surveyed populations or statutory requirements, (2) different reporting periods, (3) requirements based on electric generati ng station capacity (steam-electric generating station and peaking units with either 24 megawatts or 50 megawatts minimum nameplat e capacity could have reported on either survey, depending on the requirements at the time), and (4) data reporting procedures, d ata recording, and processing procedures for the two systems.



### Data Reliability and Quality

The FERC manages all quality control issues, mandates the type of data collected, and handles nonresponses and respondent contact records for the FERC Form 580. Quality assurance measures in the extraction of data from Form 580 responses are handled by the EIA, but EIA is not authorized to contact Form 580 res pondents. Efforts are made to rectify coding errors, tabulation er rors, keying errors, and problems of data interpretation. Because the data are not collected primarily for input into the CTRDB, howe ver, FERC 580 responses may contain estimates or averages of transportation rates for several shipments under one contract and estimates of volumes and distances of shipments.

An error detection and correction program is used to detect and correct errors that escape manual screening. This program consi sts of a set of ranges and range checks for all quantitative data fields within the database. The range values were established in coordination with FERC personnel. When the database is evaluated using this program, values that fall outside of pre-establishe d ranges are identified for investigation. Internal inconsistencies are corrected using a program that compares values from year to year to detect outliers based on the series of values. This program also resolves problems of record redundancy. Table presentations are also examined for regional and national transportation data consistencies. Data record printouts are reviewed and outliers are eliminated where deemed necessary.

For a few specific demand regions, supply regions, and/or transportation modes, time series data vary considerably from one yea r to the next. In most cases, this appears to be due to the small number of records for which transportation rate data were availabl e for that particular region or transportation mode. In those cases, fluctuations in tonnage or rates for one contract could have a substantial influence on the regional average. This situation occurs most frequently for shipments from the "Other Western Inte rior" region and for shipments by truck and "other" transportation modes (primarily conveyors).



### Data Availability

The CTRDB data are based on public use data from the FERC 580 for the years 1979 through 1987 and both public use and confidential data for 1988 through 2001. For the years 1979 through 2001, data that were unavailable for public use due to confidentiality consisted of coal transportation rates and mine price. Also, some records did not have complete data. To minimi ze the skewing of statistical calculations, records with missing data were excluded from certain calculations. Furthermore, an effort was made to increase the availability of data through derivation in tw o ways: (1) when two of the three cost data elements were ava ilable, the third one was derived from the available data; i.e., if mine price and delivered price were available, the transportation r ate was derived by subtracting the mine price from the delivered price; and (2) certain FERC 580 confidential data were made available for the years 1988 through 2001 under an agreement between EIA and the FERC to display the confidential data only in an aggregated form. A similar arrangement with the STB protects confidentiality of waybill data extracts by displaying results only in aggreg ated forms.

The availability of data on coal transportation rate per ton, distance, and tonnage is important because these variables are us ed in the calculation of the average distance shipped, average transportation rate per ton, and average transportation rate per ton-m ile. Tables 6.02

, 6.03 , and 6.04 show the number of records and tonnage contained in the CTRDB, the number of records and tonnage obtained from Form 580, the number of supplementary records and tonnage in addition to Form 580, and the number of records and tonnage with incomplete data. The data for Tables 6.02, 6.03, and 6.04 include all transportation modes.

The incomplete data in Table 6.02 represent records that do not contain data for the distance shipped. The tonnages for these records are not included in the calculation for average distance. In 2001 there were only 29 records out of 727 that did not co ntain data for distance, as a result 39.6 mmst of coal were disqualified from the average distance shipped calculation.

Similarly, the incomplete data for Table 6.03 represent records that do not contain data for the transportation rate per ton. In 2001 there are currently 342 records that do not contain transportation rate data and 125.5 mmst are disqualified from the calculati on of average transportation rate per ton mile. Note, however, that additional data from eleven utilities with incomplete rate data i n 2000 and 2001 are being sought by FERC and are expected soon.

Table 6.04 shows the data available for the calculation of the average transportation rate per ton-mile. The incomplete data for Table 

## Page 10 of 11 The Coal Transportation: Rates and Tr ends in the United States, 1979-2001

6/27/2011 htt p ://www.eia. g ov/cneaf/coal/ p a g e/trans/ratesntrends.html6.04 takes into account records that are missing both distance data and transportation rate data. Since this is a summation of data from Tables 6.02 and 6.03 there are more incomplete records (371) and tonnage (165.1 mmst) disqualified for the calculation of the average transportation rate per ton-mile. Again, the additional data from eleven utilities is expected soon and will help corre ct the thinness of 2000 and 2001 rate data.



## Summary of Validated Utility Coal Contracts in 2001 (Table 7.01)

Table 7.01 summarizes the coal supply contracts reported via the Federal Energy Regulatory Commission (FERC) Form 580. The contract information in Table 7.01 covers the 2001 reporting year, organized by electric utility company, power plant, and contract expiration date.

Coal supply contracts usually last for 1 year or longer and ar e binding agreements between coal consumers and coal producers or brokers. Provisions of coal supply contracts typically include:

 

### Term, or length, of contract, possi bly with extension provisions

 

### Minimum quantity to be purchased

 

### Sources of the coal and it s quality characteristics

 

### Base transportation rate, in dollars per ton, as of the contract effective date

 

### Rate adjustment provisions, used to adjust transportation rates for inflation or deflation.

Other items covered by a contract agreement may include coal price, coal quality incentives or penalties, supplier identificati on, coal production location, contract sign and expiration dates, and renewal and renegotiation options.

Contact: 

### George Warholic
Phone: 202- 586-2307 Email: George Warholic 

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